Justice Minister: Moldova has an inter-state conflict with Russia on the control of Transnistria

12 April 2018- The Justice Minister of Moldova, Victoria Iftodi, has participated at the Ministerial Conference in Denmark where more than 20 Justice Ministers adopted the Copenhagen Declaration. The latter voices the concerns of the overload of cases over at the European Court of Human Rights (ECtHR) and proposes recommendations.

Iftodi reportedly motivated that the overload of the ECtHR shows the necessity to reform the national system of justice and its performance in the remedy of human rights violations. The Justice Minister emphasized the need to ensure the universality of the human rights to an equal extent in the inter-state areas:

“The Republic of Moldova is confronted with a situation of inter-state conflict with the Russian Federation. As the European Court of Human Rights repeatedly stated, the Republic of Moldova does not exercise an effective control in the occupied territories. Appealing to the ECtHR remains to be the sole efficient method of remedy of the violations of fundamental rights of residents of those territories”, declared Iftodi.

The European Convention for Human Rights entered into force on 12 September 1997 in Moldova.

The Rule of Law Index 2019: Moldova comparable to Vietnam and China

The Republic of Moldova has reached an overall score of 0.49 for the Rule of Law Index 2019, according to the World Justice Project (WJP) Report. The score is calculated on a scale from 0 (the minimum score) to 1 (the maximum score). Therefore, Moldova ranks 83rd out of 126 countries globally and the 9th out of 13 countries at the regional level (Eastern Europe and Central Asia).

For one year, Moldova has not made any significant improvements. The 2019 score of Moldova remained the same as compared to 2018. An equal score was obtained by Vietnam and China at the global level, these countries being listed on the 81st and 82nd positions respectively. On the 84th and the 85th positions are listed El Salvador and Kyrgyzstan.

The Republic of Moldova obtained the lowest score for the following aspects: “lack of corruption” – 0.32, being ranked 109th out of 126 and “criminal justice” – 0.34, occupying the 97th position. For the aspect “order and security” Moldova got the best score from all 8 evaluated aspects (factors) – 0.8 out of 1 or the 28th position out of 126.

Source: The World Justice Project Rule of Law Index 2019 Report

The Rule of Law Index was also calculated by income. The Republic of Moldova was ranked the 11th out of 30 countries in the category “lower middle income”, after Vietnam and Ukraine.

At the top of the WJP Rule of Law Index for 2019 at the global level stand the Nordic countries –Denmark, Norway and Finland, followed by Sweden, Netherlands and Germany. The last positions are occupied by the Democratic Republic of Congo, Cambodia and Venezuela.

The study was conducted by the non-governmental organization “The World Justice Project” whose goal is to promote the rule of law for the development of equality and social opportunities in the world.

The Rule of Law Index 2019 presents a portrait of the rule of law in 126 countries by providing scores and rankings based on eight factors: constraints on government powers, absence of corruption, open government, fundamental rights, order and security, regulatory enforcement, civil justice, and criminal justice.

The country scores and rankings are derived from more than 120,000 household surveys and 3,800 expert surveys in the analysed countries and jurisdictions. The Index is the world’s most comprehensive dataset of its kind and the only to rely principally on primary data, measuring countries’ adherence to the rule of law from the perspective of ordinary people and their experiences.

According to the World Justice Project (WJP) report, an effective rule of law reduces corruption, combats poverty and disease, and protects people from injustices large and small. Everyone is affected by the issues of safety, rights, justice, and governance. That is why, the Rule of Law Index is one of the most important indicators that needs to be taken into consideration.

18 people sued for money laundering and tax evasion. They damaged the state budget by 30,000,000 lei

Members of an organized criminal group, consisting of 18 people, will be on the bench for charges of tax evasion and money laundering. This after purchasing agricultural products from individuals and legal entities and not reflecting accounting and tax transactions. The damages to the state are assessed at 29,486,111 lei.

Prosecutors have determined that the organized criminal group, knowing with certainty that they have illicit agricultural production in the amount of 92 216 820 lei, in order to legalize the goods purchased without accounting documents, created a criminal scheme.

Thus, through interrelated legal and physical persons, the group liquidated the funds and extracted from the bank terminals financial means in the amount of 91,371,350 lei.

In the prosecution, it was established that each member of the organized criminal group had his predetermined role.

Some defendants had the role of acquiring agricultural products without documents of origin, transmitted information about transactions and received liquefied cash for payment to agricultural producers.

Other members of the organized criminal group received information on agricultural products purchased without accounting documents, on the basis of which they prepared fictitious accounting documents in order to legalize the purchased goods and extract money from cash from bank terminals.

At the request of the PCCOCS prosecutors, the court ordered seizure for the benefit of the state of the criminal assets obtained as a result of committing the crimes in the amount of over 12 mln. of lei.

Thus 18 individuals and 4 legal persons were sent to the court by the prosecutors.

If the court recognizes them as guilty of committing the offenses incriminated, the defendants are liable to imprisonment for up to 5-10 years imprisonment.

The Troika Laundromat: The traces left in Moldova by the huge money laundering machine

Laundromats are mind-boggling frameworks for moving cash. They allow corrupt government officials, organized crime figures, and oligarchs to secretly invest their dirty money or perform other intentions.

Troika Laundromat is one of the biggest leaks of bank documents. It comprises over 1.3 million transactions from 233,000 companies and individuals, totaling more than €300.000.000.000. The data is a compilation of documents coming from several sources and obtained by the OCCRP and the Lithuanian portal 15min.lt.

Documents have been provided to 23 media partners worldwide, including RISE Moldova journalists.

The cross-border investigation shows how billions of dollars have been washed by opaque companies and banks that were later closed. Among the major beneficiaries are Russian oligarchs and politicians. They secretly purchased shares in state-owned companies, bought luxury homes, paid their children’s studies to British or Swiss schools, and settled medical bills.

The name of the leak #TroikaLaundromat – comes from the Russian investment company “Troika Dialog”, connected to the Russian Armenian banker – Ruben Vardanyan. Billion dollars flowed from Russia into UKIO Bankas (Lithuania), under the aegis of Troika Dialog. Part of the money came to Russian laundry companies.

Caption: Sergiu Brega / OCCRP

Troika Laundromat did leave traces in the Republic of Moldova.

In the first case, we show how three companies registered in Chisinau were used in financial engineering that washed over $100.000.000. Under fictitious contracts signed in Moscow and Kiev, the money was leaked from the accounts of the three savings bank companies to those of some offshore companies from a Lithuanian bank. Transactions were made at the same time as the famous tax fraud in Russia known as the Magnitski case, but there is also a close connection with fuel fraud at Sheremetyevo Airport in Moscow.

The Magnitski case

The Magnitski case became globally known after Russian lawyer Sergei Magnitski discovered (in 2007) the $230.000.000 theft from the Russian treasury, and two years later he died in a prison in Moscow because of torture and lack of assistance medical.

Money in Russia then disappeared in offshore firms. On their way to tax havens, where real beneficiaries hide, the millions of dollars have gone through a number of foreign companies, including Moldovan companies. Among them are Bunicon Impex SRL – headquartered in a deserted house in the center of Chisinau and owned by the Transnistrian region.

Local businesses held accounts with Banca de Economii. Hence, the money transferred to their accounts has been redirected to several outside banks, including UKIO Bankas in Lithuania.

In 2013, the Lithuanian authorities closed UKIO Bankas, and Banca de Economii closed its doors over two years, amid the disappearance of $1.000.000.000 from the banking system in the Republic of Moldova.

Caption: A client at the door of the UKIO Bankas, closed by the authorities in 2013. PHOTO: Erikas Ovkarenko / 15min.lt

The Magnitski connection

Among the Troika Laundromat bank records, we found nine fictitious contracts worth more than $100.000.000, concluded by three Moldovan companies with several offshore companies. Transactions were made using the same pattern used in the Magnitski case.

In most contracts, it is indicated that they were signed in Moscow in 2006-2009 and only two of them have been signed in Kiev.

The first was concluded on December 28, 2006. According to the contract, Whitmore Limited, a British phantom company, undertakes to provide equipment worth $25.000.000 to Avertas-Prim SRL in Moldova. The last one had the accounts opened at Banca de Economii.